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Treasury probe cites officials for soliciting prostitutes, accepting industry gifts, FOIA docs reveal
By Bob Cusack – 07/15/12 08:19 PM ET

Treasury Department officials have been cited for soliciting prostitutes, breaking conflict-of-interest rules and accepting gifts from corporate executives, according to the findings of official government investigations.

The revelations of unethical behavior at Treasury are detailed in little-noticed documents posted this month on governmentattic.org, which publishes agency responses to Freedom of Information Act (FOIA) requests.

While it is not uncommon for departments within the executive branch to have personnel issues, it is unusual for these types of documents to become public. They provide a rare glimpse of internal probes within the Treasury Department, exposing different episodes of misconduct.

Investigators at the Treasury’s Office of Inspector General (OIG), which responds to tips and official referrals from within the department, found that employees had engaged in unethical, and perhaps criminal, conduct.

The emergence of the OIG probe findings come in the wake of embarrassing scandals for the Obama administration at the General Services Administration (GSA) and the Secret Service. Even though the wrongdoing at Treasury is not as far-reaching or as embarrassing as those controversies, it could put the administration on the defensive with less than four months to go before the election.

Some of the OIG’s work focused on the Office of the Comptroller of the Currency (OCC), an agency housed within Treasury that was created by Congress to oversee banking institutions. It also homes in on the now-defunct Office of Thrift Supervision (OTS), which recently became part of the OCC as a result of the Dodd-Frank Wall Street reform law.

The identities of the government officials who were investigated are unclear. Their names were redacted from the documents released under FOIA, consistent with FOIA law.

In 2010, an OTC employee “misused” government resources to solicit prostitutes on three separate occasions via Craigslist. While working at the OTC, investigators said, the government staffer “viewed websites offering erotic services on a weekly basis as well as communicating with and arranging meetings with women offering erotic services."

The OIG concluded that the OTC worker had violated government rules on “notoriously disgraceful conduct.” The case was referred for criminal prosecution to the U.S. Attorney’s Office for the District of Columbia, which opted not to prosecute "absent aggravating circumstances such as underage prostitutes or human trafficking." The employee, who was not a political appointee, subsequently retired from the government, according to the documents.

In another finding, the OIG cited an OCC staffer for accepting golf fees and meals from bank executives. The staffer, who had received ethics training, said he believed playing golf with industry officials under the purview of OCC was “a condoned activity.”

The golf outings took place on multiple occasions during workweeks when OCC was conducting bank examinations. Many of the greens fees and meals at the golf course were paid for by corporate executives.

The OIG stated the OCC official “violated several regulations covering ethics and the conduct of employees in the performance of their official duties.”

The U.S. Attorney’s Office for the Southern District of Georgia, however, declined to pursue criminal charges.

OIG found other financial conflicts of interest with the OCC relating to contract bids and the acceptance of improper gifts such as flowers, meals and at least one limousine ride. A separate Treasury official was deemed to have a financial conflict of interest in 2010 when the bank examiner disclosed he had an overdraft protection line of credit loan from a financial institution that was regulated by the OTS.

The documents from OIG also show that a few allegations of unethical conduct were found to be without merit.

Treasury Department officials say the violations are isolated incidents.

"Treasury has a strong ethics policy that we expect all of our employees to follow, and the overwhelming majority of them do. As with any large organization, issues of misconduct occasionally arise. When that happens at Treasury, we act promptly and decisively to address them. The OIG moved aggressively to investigate the isolated instances of misconduct referenced in these documents, most of which were brought to the OIG’s attention by bureau management," a Treasury spokesman told The Hill.

An OCC spokesman said that "the agency does not comment on individual personnel matters. As your review of the documents will note, many of the investigations were found to be without merit, others are several years old, and some reference referrals made by the OTS, prior to the integration of that agency’s responsibility’s into the OCC."

Unlike most government entities, the OCC does not receive appropriations from Congress. Its operations are primarily funded from assessments levied on national banks and federal saving associations.

OCC has nearly 4,000 full-time equivalents (FTEs), while Treasury has more than 107,000 FTEs. The OIG report highlights the wrongdoing of a handful of Treasury workers.

The OIG determined that a Treasury employee in the Financial Management Services division used government resources to mail personal bills over an eight-year period.

Another ethics violation in the OIG documents focused on a Treasury Department employee in the Office of Foreign Asset Control (OFAC).

The intoxicated OFAC official attempted to bring prohibited alcoholic beverages into a college football game, and was stopped by law enforcement.

The OFAC official was perceived to be “disorderly and disruptive” and was nearly arrested even after University of North Carolina police noticed the official’s badge and credentials. The report said the officers used “restraint because they believed him to be a law enforcement officer.” OIG found him to be in “violation of Treasury policy.”

Other than the employee who surfed the Internet for prostitutes, it’s unclear if the workers whom the OIG investigated are still employed at Treasury.

In an interview with The Hill, Eric Thorson, the inspector general at Treasury, praised senior leaders at the department for supporting the freedom to aggressively investigate allegations. He noted that Treasury is a "fairly large department," suggesting the actions of a few should not tarnish the vast majority of employees who comply with government ethics laws.

"Many organizations have people who do dumb things," he said.

Thorson stressed that the OIG findings are not comparable to GSA’s scandal of lavish spending, saying Treasury has a clear track record of not tolerating misconduct. He and other Treasury officials said that the OIG reports show Treasury’s systems are working because they have rooted out problems within the department.

http://thehill.com/homenews/administrat … stry-gifts

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